The International Monetary Fund (IMF) warns rising oil and food prices are having a negative impact worldwide, especially in developing countries where extreme poverty is growing. While higher prices are reducing people’s living standards in advanced countries, an IMF study reports they are having a more extreme effect in developing economies – where the typical household is now spending more than 50 percent of their annual income on food.

Dominique Strauss-Kahn, Managing Director of the IMF, says there’s a delicate balance between aiding the poorest citizens and maintaining a stable economy:

Mark Plant, Deputy Director of the Policy Development and Review Department, addresses the danger presented to countries by the sharp increase in food and fuel prices in 2007 and 2008: